What is an LPA and what does it do?

You may have heard people talking about LPAs - but what are they and what do they do?

Stephanie Chung, solicitor in the Private Client team at Wake Smith, explains, in the first of two articles on the subject.

It will cover:

• What is it?
• Why put an LPA in place?
• Types of LPA
• Choosing your attorney
• Registering the LPA
• Changing your mind

What is it?

An LPA is a document by which you choose someone to take certain decisions on your behalf. That person is called your “attorney”.

Lasting powers of attorney (LPA) was created under the Mental Capacity Act 2005, and came into effect in English law on 1 October 2007.

The LPA replaced the former enduring powers of attorney (EPA) which were narrower in scope.

Their purpose is to meet the needs of those who can see a time when they will not be able to look after their own personal, financial or business affairs.

The LPA allows them to make appropriate arrangements for family members or trusted friends to be authorised to make decisions on their behalf.

The LPA is created and registered with the Office of the Public Guardian (OPG), an executive agency of the Ministry of Justice of the United Kingdom.

Why put one in place?

Many people have seen a friend or relative become incapable of dealing with their own affairs as a result of mental incapacity.

When this happens, it is often difficult for the family to pay outstanding bills or deal with the person’s finances generally. If this situation arises, then an application has to be made to the Court of Protection and the procedure can be both slow and costly.

This can be avoided by making a LPA now.

Types of LPA

There are two types of LPA – the Property and Financial Affairs LPA and the Health and Welfare LPA. You can make just one type of LPA, if you wish, or both of them.

Property and Financial Affairs LPA

This LPA gives your attorney power to look after your property and finances on your behalf. This would include the ability to deal with the following matters:

• Managing bank accounts and investments
• Selling your property
• Handling state benefits and pensions
• Completing your income tax return
• Making certain gifts

You can also include restrictions in the document which limit what the attorney can do. These need to be carefully phrased to avoid confusion in the future.

Health & Welfare LPA

This LPA allows your attorney to make decisions about your health and personal welfare. This would include the following types of decision:

• Where you are to live
• Arrangements for your day to day care
• Decisions relating to medical treatment
• Access to your personal information
• Making complaints about your care or treatment

You can limit the scope of the LPA if you don’t want your attorney to have such wide powers and give your attorney the power to refuse or consent to life-sustaining medical treatment on your behalf.

Choosing your attorney

You can choose anyone you like to be your attorney, so long as they are over 18, not a bankrupt and not mentally incapacitated.

It is sensible to choose someone who is good at handling money to act under a Property and Financial Affairs LPA.

Choose someone you get on with, who can be relied upon to act in your best interests. Most people choose close relatives or friends to act as their attorney, alternatively you can appoint a solicitor to act as your attorney.

More than one attorney can be appointed, and you need to specify whether they are to act “jointly” or “jointly and severally”. Joint attorneys must always act together and cannot act separately. This means that if one of the attorneys dies, the LPA will be invalid. Attorneys who are appointed jointly and severally may act together but can also act separately if they wish, which provides more flexibility.

Certificates

Every LPA has to contain a statement from at least one “certificate provider”.

The certificate provider will discuss the LPA with you, and then sign a certificate to say that in his or her opinion you understand what an LPA is and have not been pressured into making it. Wake Smith can act as your certificate provider for no extra charge.

When can you start using your LPA?

Neither type of LPA can be used until it has been registered with the Court.

The Health & Welfare LPA cannot be used unless you lose your mental capacity. The Property and Financial Affairs LPA can be used straight away, even if you still have capacity. This can be useful if a physical disability makes it difficult for you to deal with financial matters or, if you would simply like your family to be able to look after matters for you.

Registering the LPA at the Court

Either you or your attorney can apply to the Court of Protection for registration of the LPA.

Until the LPA is registered, your attorney cannot act on your behalf. The registration process takes at least six weeks, so we advise registering the LPA sooner rather than later, in case it is needed in a hurry.

After Registration

Once a Property and Financial Affairs LPA has been registered, your attorney has full power to administer your affairs (subject to any restrictions contained in the LPA).

Once a Health and Welfare LPA has been registered, your attorney only has power to take health and welfare decisions on your behalf if you are not able to make those decisions yourself.

In both cases, your attorney must follow the Mental Capacity Act 2005 Code of Practice whenever acting on your behalf.

This Code gives guidance as to how decisions should be made by and for people with impaired capacity and is essential reading for all attorneys. In particular, the Code states that your attorney should support you to make your own decisions if you are able to do so, rather than simply taking the decision for you. Any decisions that your attorney takes on your behalf must be in your best interests.

The Court of Protection has wide powers to supervise the actions of attorneys. That said, it will not usually exercise these powers unless problems are brought to its attention. It is therefore extremely

important that you only choose as your attorney somebody in whom you have the utmost confidence that they will act in your best interests.

Changing your mind

If you wish to cancel your LPA prior to registration this can be done by means of a simple deed. If you wanted to cancel the LPA after it is registered, you would need to make an application to the Court of Protection.

A recent survey by consumer watchdog Which? highlighted a lack of public understanding on LPAs.

In a poll of 2000 people across the UK, 85% knew what LPA is, but just 15% said they would give someone else power of attorney over their affairs. Of those, 16% incorrectly thought they would lose access to their financial accounts upon registering an LPA, rather than when they become unable to manage themselves. Additionally, 77% of people incorrectly thought an LPA could be set up at any time.

Stephanie concludes: “Everyone should think about making LPAs as part of sensible planning for the future.

“Once correctly set up, the LPAs can be put away for an eventuality which, hopefully, will never arise. You, though, will have the peace of mind that comes from knowing that, if the worst does happen, someone you trust will be able to make decisions on your behalf.”

If you are considering making an LPA, take professional advice tailored to your own circumstances. For further advice contact Stephanie Chung on 0114 224 2114.

Published 01/03/22